New York Law School Studies Challenge Muni Broadband

The Advanced Communications Law and Policy Institute (ACLP) at New York Law School has released two reports it says show that municipal broadband is risky government business that rarely pays off.

ISPs have argued the same thing in pushing for state laws limiting municipal broadband buildouts.

The first report is a case study of a failed government-owned network in Bristol, Va., and the second is a "policy briefing" looking at various efforts.

"These analyses make clear that municipal broadband remains a risky endeavor that rarely generates the benefits touted by proponents," said the institute.

The case study points out that while the Barack Obama Administration touted the Bristol system as a template for success, it is currently being sold for a loss, adding that early success often proves fleeting, followed by an expensive, time consuming and complicated exit strategy when the effort fails.

ISPs have argued that consumers, as in taxpayers, are one casualty of government efforts since they can be left paying for the mistake.

The study argues that the full cost of unwinding a failed system should be taken into account of any cost-benefit analysis of government broadband.

The policy briefing cites the Bristol system, one in Pitcairn, Pa., what it calls a "questionable" feasibility study related to a build in Madison, Wis., and a cloud of uncertainty over builds in Kentucky and Connecticut.

The FCC under chairman Tom Wheeler, on a party line vote, preempted state laws in Tennessee and North Carolina limiting muni builds there, but the decision was overturned last summer on the grounds that the FCC did not have the authority to do so. The move was on authority, rather than whether there was or was not a public interest in preempting the state laws. The FCC chose not to challenge the court ruling.